Ioe Public Sector Vas White Paper 121913final

8/19/2019 Ioe Public Sector Vas White Paper 121913final

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Joseph BradleyChristopher RebergerAmitabh DixitVishal Gupta

Internet of Everything: A $4.6 TrillionPublic-Sector Opportunity More Relevant, Valuable Connections Will Boost Productivity,Revenue, and Citizen Experience, While Cutting Costs

Executive Summary• The Internet of Everything — the networked connection of people, process, data,

and things — is opening up new opportunities (and risks) that public-sector

leaders need to consider from multiple perspectives: policy leadership, services

provision, and regulation.

• Cisco’s analysis indicates that IoE is poised to generate $4.6 trillion in Value at

Stake for the public sector over the next decade (compared with $14.4 trillion

for the private sector over the same period).

• The $4.6 trillion in public sector Value at Stake will result from IoE’s ability to

help public-sector organizations manage assets, optimize performance, andcreate new business models.

• 70 percent of the public sector’s IoE Value at Stake will come from agency-

specific implementations, while 30 percent will derive from cross-agency

adoption of IoE.

• The five primary drivers of IoE Value at Stake for the public sector are:

1) employee productivity, 2) connected militarized defense, 3) cost reduction,

4) citizen experience, and 5) increased revenue.

• More than two-thirds of IoE’s Value at Stake for the public sector (69 percent)

will be powered by citizen-centric connections (person-to-person, machine-

to-person/person-to-machine).

• $4.6 trillion in public sector Value at Stake is equivalent to about one-third ofthe expected civilian labor productivity growth over the next 10 years.

• 95 percent of IoE’s total Value at Stake for the public sector will come from just

over half (23) of the 40 use cases analyzed by Cisco.

• Cities will generate almost two-thirds (63 percent) of IoE’s overall civilian

benefits. To maximize value, cities should combine uses cases rather than

approaching them individually.

Page 1 © 2013 Cisco and/or its affiliates. All rights reserved.

70 percent of the publicsector’s IoE Value at Stakewill come from agency-specific implementations,while 30 percent willderive from cross-agencyadoption of IoE.

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IntroductionJust as broadband has been a critical enabler of economic growth, social inclusion,

and improved government service delivery over the past few decades, the Internet

of Everything (IoE) — the networked connection of people, process, data, and things

— is creating many new opportunities (and risks) that public-sector leaders need

to consider. In addition to connecting people, IoE’s ability to connect ever-growing

numbers of sensors and actuators to objects or things on the Internet, to extract and

analyze growing amounts of useful data, and then to use that analysis in automated

and people-based processes has enormous potential across all sectors.

IoE is capable of helping organizations achieve many public-policy goals, including

increased economic growth and improvements in environmental sustainability,

public safety and security, delivery of government services, and productivity. Thesebenefits, of course, don’t come without costs and public-policy concerns.

Now is the time for governments at all levels to assess where and how they might

use IoE in their own operations, as well as the role it could play in achieving broader

economic and social goals.

To help public-sector organizations better understand the IoE opportunity, Cisco

recently concluded a comprehensive economic analysis based on 40 agency-

specific and cross-industry use cases. This “bottom-up” analysis spanned the

public-sector spectrum, encompassing education, culture & entertainment,

transportation, safety and justice, energy & environment, healthcare, defense, and

next-generation work and operations.

Why IoE for the Public Sector?Governments at the city, state/province, and federal levels confront a similar

dilemma worldwide: how to meet increased citizen expectations in the face of

reduced or flat budgets. This challenge has contributed to an increasing gap

between citizen expectations and what governments actually deliver. In addition,

a large set of other issues needs to be addressed across federal, city/state/local,

healthcare, defense, and education (see Figure 1).

More than perhaps any technological advance since the dawn of the Internet, the

Internet of Everything — the networked connection of people, process, data, and

things — holds tremendous potential for helping public-sector leaders address their

many challenges, including the gap currently separating citizen expectations andwhat governments are actually delivering.

IoE offers governments the opportunity to make significant advances in citizen

services. For example, IoE will enable governments to create services that

leverage Big Data and crowdsourcing to expand the power of machine-to-

machine communications for citizen delivery. As large organizations, government

departments and cities can benefit directly from the same new technologies that are

transforming supply-chain management and logistics in the private sector. Similarly,

they can build on the potential of mobile technology to develop “smart working” for


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More than perhaps anytechological advance sincethe dawn of the Internet,the Internet of Everything(IoE) — the networkedconnection of people,process, data, and things —holds tremendous potentialfor helping public-sector

leaders address their manychallenges, including thegap separating citizenexpectations and whatgovernments are currentlydelivering.


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their employees, resulting in significant cost savings. “Smart building” strategies can

also reduce costs, while generating a positive environmental impact.

Figure 1. The Public Sector Faces a Multitude of Issues: Productivity, Revenue, Costs, andCitizen Experience.

Source: Cisco Consulting Services, 2013

The transformational impact of IoE in the public sector will be realized through

wholesale transformation of the way services are designed and how they utilize

information to meet the needs of citizens more effectively.

Immediate IoE benefits will occur in the domain of statistical services and theavailability of near-real-time data pertaining to various citizen behaviors — their

location, the way goods are moved across borders, citizens’ consumption habits,

and their future intentions. When applied to large populations, Big Data and the

associated analytics will increasingly enable predictive modeling and, as a result,

improvements to public infrastructure. These capabilities will also allow better

anticipation of emerging trends, short-term fluctuations in demand driven by external

factors (such as weather conditions or public events), and better management of

emergency responses. In safety and security, predictive modeling is already being

used to help deploy policing resources for greater effectiveness in fighting crime.1

These developments are already driving sector-specific IoE infrastructure programs

— such as smart grid, smart metering, early-warning systems, and critical-

infrastructure protection — that support governments’ strategic policy objectives.

IoE-driven benefits from programs such as connected transportation, smart roads,

social care, and education accrue as reductions in overall costs, especially through

better targeting and control of resource usage. Other programs have indirect

benefits for government — economic, social, or environmental — but direct benefits

for citizens and businesses in terms of reduced transactional costs and time saved,

or in external benefits such as better quality of life. For example, improved traffic

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The transformational impactof IoE in the public sectorwill be realized throughwholesale transformationof the way services aredesigned and how theyutilize information to meetthe needs of citizens moreeffectively.


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flow saves time, money, and energy for individuals and businesses. Researchers

at Harvard University2 have identified whole system impacts of smart road systems

that go beyond shorter journey times and reduced traffic congestion to also promote

better land use as car parking space is used more efficiently — eventually resulting in

reduced pressure on urban land use and, hence, lower housing costs.

IoE also offers public-sector bodies the ability to manage regulatory and transfer-

payment functions better. Many agricultural systems around the world rely directly

on subsidies and payments to farmers based on returns about such things as

land use and livestock numbers. In Australia, measures that will allow farmers to

monitor their cattle herds offer the possibility of more accurate and timely returns

to government for subsidy regimes, and for managing animal health on a national

and potentially international scale.3

Similar principles apply to the management offood chains in the interest of public health. Management of land use with Big Data

is being trial-tested on a global scale by projects developed by the Planetary Skin

Institute, a collaboration supported by Cisco, NASA, and a number of governments.

IoE Is Happening Now in the Public SectorThe current state of IoE-based public-sector programs is characterized by a high

degree of sponsorship and encouragement by national governments. IDC estimates

that 70 percent of spending on Smart City projects in 2013 will be focused on

energy, transportation, and public safety, and 90 percent of it will be at least partially

funded by national or international governments.4 IoE development strategies for the

public sector typically fall into one or more of the following categories:

National Strategies

In South Korea, for example, two ministries have been involved in the promotion

and deployment of Internet of Things (IoT)5 visions, R&D activities, and use cases in

terms of radio frequency identification (RFID), USN (ubiquitous sensor network), and

M2M (machine-to-machine) as the enabling technologies for IoT. The intention has

been to coordinate development under these technology-defined categories, but

with a view to articulating the broader vision of “IoT for the future direction.” With

this in view, the department with responsibility for the manufacturing industry has

a goal to make RFID and sensor networks penetrate the everyday life of people to

deliver a better quality of living.

Economic Development/Industry Strategies

The United Kingdom has recently included the Internet of Things and Smart Citiesas two of five strands, alongside cloud computing, e-commerce, and Big Data, in its

Digital Economy Strategy.6 The approach is based on a wish to coordinate existing

public-sector efforts, including work in the research community, and to create an

environment conducive to private-sector innovation and investment.

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Researchers at HarvardUniversity have identifiedwhole system impactsof smart road systemsthat go beyond shorter journey times and reducedtraffic congestion to alsopromote better land use ascar parking space is used

more efficiently — eventuallyresulting in reducedpressure on urban land useand, hence, lower housingcosts.


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Single-Sector Transformation Programs

Visible impact of IoE technologies in the delivery of public services is most advanced

in single applications that support specific policy goals. This most often involves

a high degree of public-private partnership, with governments (including city and

regional governments) taking initiatives to bring about or accelerate solutions

that the market might not otherwise deliver on its own. The United Kingdom’s

Smart Metering program, for example, aims to deliver a visual display of energy

consumption in every household by 2020.7 The national policy goal is to reduce

energy consumption through better awareness of usage, thereby also decreasing

household expenditure. The program was designed by the regulator (Ofgem) in

consultation with industry, consumer, and academic interests, and delivery will be

handled by the utility companies.

Sponsorship of Demonstration Projects

The present wave of investment includes a large number of demonstration projects

as pubic authorities and industry alike seek to learn more about sustainably

implementing and managing IoE programs. This is particularly true in Smart

City programs such as those in Nice, Barcelona, and Glasgow, where the U.K.

government recently announced funding of £24 million by the Technology Strategy

Board to showcase how cities can grow their local economy and improve the lives

of their citizens by using new technologies to integrate and connect city systems.8

Japanese cities are similarly looking to develop programs that respond to concerns

about public safety and energy security following the earthquake and tsunami

of 2011, while also addressing other local issues, especially those of an aging

population.9

Programs that Build the Knowledge Base Through R&D Funding

The public sector has played a crucial role in the development of the Internet of

Things by actively promoting involvement of the academic sector. This has been

achieved through existing research funding mechanisms and specific programs. The

EU made the Internet of Things a major domain of the FP7 program, creating the

Internet of Things Initiative (IOT-i)10 and an IoT European Research Cluster, which

aimed to provide “a lightweight portfolio management for overcoming isolated,

redundant research and knowledge barriers.” The cluster created a systematic

portfolio with 14 programs, including technical, social, and organizational themes.11

Challenge Funding and Competitions Aimed at Stimulating Innovation

Governments are also eager to ensure that the Internet of Everything provides an

opportunity to develop new, innovative businesses that grow and become significantemployers as IoE’s domain expands. One favored approach has been competitions

that offer funding, mentoring, and other support to the best entries. Examples are

the U.K. TSB’s funding competitions, including several that are specific to the digital

economy.12

Visible impact of IoEtechnologies in the deliveryof public services ismost advanced in singleapplications that supportspecific policy goals.



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IoE is already delivering value for the public sector. Here are some examples:

• 7 percent crime reduction based on smart lighting (U.K.)13

• 15 percent travel savings due to immersive video (high-definition video

collaboration, U.S.)14

• 30 percent reduction in waste-collection costs driven by usage of sensors

(U.S.)15

• $950 savings per court appearance through use of video technology (U.S.)16

IoE Will Create $4.6 Trillion in ‘Value at Stake’ for the

Public Sector GloballyFor the public sector, Cisco defines IoE “Value at Stake” as “the potential value thatcan be created by public-sector organizations based on their ability to harness IoE

over the next decade (2013-2022).” Cisco predicts that the IoE Value at Stake will

be $4.6 trillion for the public sector worldwide over the next decade (see Figure 2).

Figure 2. Agency-specific Use Cases Will Drive 70 Percent of IoE’s Value for Public Sector.


When combined with Cisco’s estimated IoE Value at Stake for the global private

sector over the next decade ($14.4 trillion), the overall Value at Stake reaches $19

trillion.17

For the public sector, Ciscodefines IoE “Value at Stake”as “the potential value thatcan be created by public-sector organizations basedon their ability to harnessIoE over the next decade(2013-2022).”


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Cisco’s public sector Value at Stake estimate includes:

• Benefits for agencies, employees, and citizens

• Quantified citizen outcomes (such as reduced traffic congestion, crime, etc.)

• Hard cost savings, increased revenues, and productivity gains

• Allowances for implementation and operational costs

The public sector Value at Stake estimate does not include:

• Privately owned citizen services

• Private-sector impact from public expenditure

Cisco’s analysis shows that most of the potential Value at Stake (70 percent, or$3.2 trillion) will be agency-specific, while 30 percent ($1.4 trillion) will be driven by

cross-agency adoption of IoE.

Cisco calculated the IoE Value at Stake for the public sector by taking a bottom-up

approach considering the value created by 40 use cases — both agency-specific

and cross-agency. Top-down analysis was also performed as a cross-check to

validate the completeness and order of magnitude of the more thorough bottom-up

approach. Finally, care was taken not to double-count value across use cases.

The $4.6 trillion in IoE Value at Stake for the public sector is equivalent to about

one-third of the expected civilian labor productivity growth over the next 10 years

(see Figure 3). Worldwide public sector labor productivity increases by around 3

percent each year.18

Dividing the civilian value generated each year by the expectedannual salary costs provides a 1 percent improvement annually. The remaining

productivity growth is likely due to increased training and use of unconnected

(“dark”) assets.

Figure 3. $4.6 Trillion in Value at Stake Is Equivalent to About One-third of Expected CivilianLabor Productivity Growth.


The $4.6 trillion in IoE Valueat Stake for the publicsector is equivalent to aboutone-third of the expectedcivilian labor productivitygrowth over the next 10years.


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Five Drivers of Value at Stake for the Public SectorThere are five main drivers of the $4.6 trillion of IoE Value at Stake for the public

sector. These findings allow public-sector leaders to begin planning how they can

benefit from IoE. The five drivers are:

1. Employee productivity ($1.8 trillion): IoE improves labor effectiveness for new

and existing services.

2. Connected militarized defense ($1.5 trillion): IoE generates a fourfold force-

multiplier effect through improved situational awareness and connected

command centers, vehicles, and supplies.

3. Cost reductions ($740 billion): IoE improves labor efficiency and capital-

expense utilization, leading to reduced operational costs.

4. Citizen experience ($412 billion): IoE shortens “search” times, improves the

environment, and produces better health outcomes.

5. Increased revenue ($125 billion): IoE improves the ability to match supply

with demand, while also enhancing monitoring and compliance.

These drivers illustrate how IoE can impact every aspect of public-sector processes

— including both cost-cutting and revenue-raising activities.

In addition, to benefit from IoE, firms must combine technology-enabled security

capabilities (both logical and physical) with policies and processes designed to

protect the privacy of citizen information. IoE’s growth potential in the public sector

over the next decade will rely heavily upon the success of organizations’ security

and privacy efforts.19

Which Connections Matter Most?By definition, IoE includes three types of connections — machine-to-machine,

person-to-machine (P2M), and person-to-person (P2P). Combined, P2M and P2P

connections will constitute 69 percent of the total IoE Value at Stake for the public

sector by 2022, while M2M connections make up the remaining 31 percent (see

Figure 4). It is important to note that while M2M connections are fast becoming a

sizable source of value, the end result of these connections is ultimately to benefit

people. The bottom line is that the IoE Economy is about enabling people to be

more productive and effective, make better decisions, and enjoy a better quality of

life.

In the public sector, person-to-person connections include, for example, telework,

BYOD, connected learning, mobile collaboration, and travel avoidance. Examples of

machine-to-person/person-to-machine connections include smart parking, disaster

response, and inpatient monitoring.

Combined, P2M and P2Pconnections will constitute69 percent of the total IoEValue at Stake for the publicsector by 2022, while M2Mconnections make up theremaining 31 percent.


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Figure 4. 69 Percent of IoE’s Value at Stake Will Be Powered by People-CentricConnections (P2P, P2M/M2P).


Connected healthcare and patient monitoring provide a great example. By enriching

the connections between medical devices and both patients and doctors (M2P),

and among patients and doctors themselves (P2P), better hospital-level care can be

provided at patients’ homes. This improves quality of life, increases positive medical

outcomes, and reduces costs for both providers and patients.

Cities Stand To Benefit Most from IoECisco’s research and analysis indicate that cities will generate almost two-thirds (63

percent) of IoE’s civilian benefits globally over the next decade (see Figure 5). Bycomparison, states/provinces and federal will produce 22 percent and 15 percent of

the remaining benefits, respectively.

Figure 5. Cities Will Generate Almost Two-thirds of IoE’s Overall Civilian Benefits.


Cisco’s research andanalysis indicate that citieswill generate almost two-thirds (63 percent) of IoE’scivilian benefits globallyover the next decade.


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To maximize IoE value, cities should strive to combine use cases rather than

approaching them individually. Cities experiencing budget constraints, for example,

should focus on IoE’s revenue-generating use cases, such as smart parking, water

management, and gas monitoring — the “killer apps” for cities.

Cooperation across city functions and departments (including resource sharing)

is essential to deriving value from IoE. In addition, public-private partnerships

provide cities with an opportunity both to defray costs and increase IoE benefits for

government, citizens, and industries.

City budgets vary, although transportation, public safety, and waste management

often represent about half of a total budget. Based on the expected impact of IoE, a

city could expect to improve services (or decrease costs) in the short term by about

5 percent.

Real-World Use Cases Show IoE’s Value for thePublic SectorTo receive the most value from IoE, public-sector leaders should begin transforming

their organizations based on key learnings from use cases that show how IoE works

in the real world. Interestingly, 95 percent of IoE’s total Value at Stake for the civilian

public sector will be driven by just over half (23) of the 40 use cases analyzed by

Cisco.

There are 350 million public employees in the world, and the use cases that improve

labor productivity are some of the largest. These, combined with opportunities ineducation and security, provided the main global benefits. For federal agencies, the

Next-Generation Workforce use cases (mobile collaboration, BYOD, telework, virtual

desktop, travel avoidance) represent the largest opportunity to realize IoE value.

The use cases featured below, which represent $2.2 trillion of the $4.6 trillion

IoE Value at Stake for the public sector, were selected for their usefulness in

helping public-sector leaders determine how to move forward with regard to their

organizations.

Each of these use cases includes a general description; the amount of contribution

to the total Value at Stake; the people, processes, data, and things involved in the

use case; and specific areas of impact.

1. Smart parking: $41 billion of total Value at Stake

Provides real-time visibility into the availability of parking spaces across a city.

Residents can identify and reserve the closest available spaces; traffic wardens can

recognize noncompliant usage; and the municipality can introduce variable pricing.

Interestingly, 95 percent ofIoE’s total Value at Stake forthe civilian public sector willbe driven by just over half(23) of the 40 use casesanalyzed by Cisco.


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• New things created: Connected parking spaces, parking meters

• New data flows: Space availability

• Process innovation: Pricing/payment; enforcement; finding spaces

• People impact: Traffic wardens; citizens/drivers; city planners

• Value impact: Increases compliance by 30 percent; enables city data sales;

reduces traffic congestion/time required to park/fuel usage; dynamic pricing

increases revenues

2. Water management: $39 billion of total Value at Stake

Connects the household water meter to an IP network to provide remote information

on use and status.• New things created: Connected water meters

• New data flows: Water meters

• Process innovation: Water usage

• People impact: Citizens, city planners

• Value impact: Reduces labor and maintenance costs; improves accuracy of

readings; decreases water consumption by citizens; lowers meter-reading costs

3. Gas monitoring: $69 billion of total Value at Stake

Connects the household gas meter to an IP network to provide remote information

on usage and status.

• New things created: Connected gas meters

• New data flows: Gas meters

• Process innovation: Gas usage

• People impact: Citizens, city planners

• Value impact: Reduces labor and maintenance costs; improves accuracy of

readings; decreases gas consumption by citizens; lowers meter-reading costs

4. Chronic disease management: $146 billion of total Value at Stake

Provides remote monitoring of patients with three chronic diseases: congestive

heart failure, chronic obstructive pulmonary disease, and type 2 diabetes. All care

aspects are consolidated and coordinated in a less-expensive home setting.

• New things created: Patient-monitoring systems

• New data flows: Patient statistics

• Process innovation: Treatment protocol, admissions, discharge

• People impact: Patients, clinicians

• Value impact: Reduces admissions; enables shorter hospital stays due to

home-monitoring systems; promotes usage of standardized treatments that

conform to best practices

Chronic diseasemanagement providesremote monitoring ofpatients with three chronicdiseases: congestive heartfailure, chronic obstructivepulmonary disease, andtype 2 diabetes.


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5. Road pricing: $18 billion of total Value at StakeProvides automatic payments as vehicles enter “priced” areas in busy zones of

cities, improving traffic conditions and revenues.

• New things created: Vehicle payment system

• New data flows: Vehicle records, payment prices

• Process innovation: Pricing, payment

• People impact: Citizens/drivers; city planners; traffic wardens

• Value impact: Increases revenue; reduces traffic congestion, leading to savings

in road expansion; reduces CO2 emissions

6. Telework: $125 billion of total Value at Stake

Eliminates the daily commute to the office by enabling employees to work fromhome or remote locations.

• New things (capabilities) created: Traveling employees

• New data flows: Information and communication

• Process innovation: Connectivity, collaboration

• People impact: Employees, employers

• Value impact: Reduces the real-estate requirement for employers; lowers

janitorial and printing costs; improves employee retention and productivity;

provides additional employment opportunities

7. Connected learning: $258 billion of total Value at Stake

Delivers an authentic, relevant, collaborative learning experience through scaling of

instruction, use of electronic resources, and data-driven decisions.

• New things (capabilities) created: Connected students, teachers, campuses

• New data flows: Study modules, lectures

• Process innovation: Instruction, learning techniques

• People impact: Students, teachers

• Value impact: 40 percent improvement in teacher utilization through recorded

lessons; 50 percent reduction in instructional supplies

8. Connected militarized defense: $1.5 trillion of total Value at Stake

Provides real-time situational awareness to combat personnel in theater byconnecting command-center tents, vehicles, and special forces. Enables the ability

to visualize the location of allied and enemy personnel and material.

• New things created: Connected command centers, vehicles, supplies

• New data flows: Location of allied and other forces

• Process innovation: Situational awareness

• People impact: Combat personnel

• Value impact: Multiplier effect — fourfold increase in combat-mission

effectiveness

Connected learningdelivers an authentic,relevant, collaborativeexperience through scalingof instruction, use ofelectronic resources, anddata-driven decisions.


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What Should Governments Do?Governments have a role in maximizing IoE’s benefits for all citizens, while at

the same time minimizing potential negative effects. As with the Internet itself,

IoE’s technologies will transcend national boundaries, so it will be important

for governments to work together to promote international collaboration and

governance. Governments will need to focus on three key areas:

1. Economic development: IoE’s growth in the public sector will rely on

governments making it part of their broader economic development strategies.

This is likely to include promoting a business environment that encourages

innovation in the development and use of IoE, including IoE-related R&D,

cultivation of IoE-related specialist skills through the education system,

and actions necessary to foster development of the required infrastructure.Governments will also wish to encourage private-sector implementation of

IoE-based solutions to advance wider program goals, such as environmental

sustainability, infrastructure resilience, effective transportation, and public

safety and protection.

2. Service delivery and efficiency: Public-sector bodies will have similar

opportunities to create new services and capabilities and/or to improve

existing ones. At the city level, these include applications such as improved

building management, traffic flow, street lighting, water or waste management,

and policing. At the state/provincial level, these will encompass highway

infrastructure (such as pavement and bridge conditions), highway traffic

management, health and education applications, and agricultural programs

(such as irrigation). At the national level, applications will include borderprotection, tax collection, and critical infrastructure protection (such as

airports, railways, and ports).

3. Policy and regulation: Governments will continue to have a policymaking

and regulatory role in relation to IoE. They will need to devise policies for

the allocation of resources, such as radio spectrum, as well as support the

openness and efficient operation of markets. The pervasive nature of IoE

— and the potential for it to be used extensively for management of critical

infrastructure — means that governments will need to help ensure the safety

and security of the systems themselves, while also protecting users’ personal

information and privacy. As an increasing number of the societal systems

become “smart” through IoE technologies, government will be responsible

for ensuring social cohesion and inclusion as part of the process. Thedevelopment of new technologies across all sectors — driverless cars, food

testing, or health monitoring, for example — will also call for new regulations

in the interests of protecting public safety. Other IoE applications may lead to

policy and/or regulatory actions to support environmental sustainability (such

as a requirement to use smart meters) or access (for example, ensuring all

schools can use IoE-related technologies for collecting and analyzing data

about students’ learning behaviors).

As with the Internetitself, IoE’s technologieswill transcend nationalboundaries, so it will beimportant for governmentsto work together to promoteinternational collaborationand governance.


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The growth of the Internet of Everything will also have implications for the role and

modus operandi of government itself. These considerations arise principally from

the explosion of data generated about individuals, processes, and systems. The

potential (if not the desirability) of governments greatly to increase their surveillance

capability is a stark fact. Set against this backdrop, other organizations will hold

massive stores of data that are not necessarily accessible to the authorities.

Governments may wish to reconceptualize whole areas of their current business —

for example, redefining taxation in a world in which the movement and ownership of

goods (and information) can be known much more precisely. The potential of these

IoE-driven changes prompted the U.S. Federal Trade Commission to issue a call for

input on the privacy and security implications of the Internet of Things/IoE.20

Governments also need to consider the way that IoE-based systems are plannedand implemented, and, in particular, how citizens’ expectations of openness and

accountability can be met. IoE programs are complex and involve relationships

with private-sector businesses. In areas of technological innovation, government

organizations will need to equip themselves with technical and business expertise

if they are to maximize public benefits. They will need, for example, to have a good

understanding of issues such as the ownership of intellectual property, liability, and

rights to the data created by IoE applications, while leveraging education systems to

ensure public awareness and understanding of IoE’s implications.

The Internet has led citizens to demand greater transparency and accountability

as information has become more freely available about governments and the

activities of government agencies and their employees. This will not diminish with

the deployment of IoE applications. The principles of the reverse panopticon21

andsurveillance — citizens surveilling the authorities — will continue to apply. Citizens will

demand access to information collected about themselves, and they will want large

data sets to be accessible in accordance with open-data principles. This movement

is already underway. As part of the Miami Dade Smart City project, for example,

the county plans to consolidate data analytics about finance, human resources,

budgeting, and planning, and to provide users with access the government’s

financial information online.22

The fundamentals of developing a strategy for the Internet of Everything are not

very different from those of any other technology-related strategy, whether at a city,

regional, or national level. The questions to ask relate to the benefits that are sought,

and how to obtain and manage the resources — whether financial, technical, or

human — to achieve them. At a governmental level, these questions are complicatedby the need to consider broader social impact and the regulatory responsibility,

and by the dual governmental roles of “promoter of economic development” and

“provider of public services.”

Governments also need toconsider the way that IoE-based systems are plannedand implemented, and, inparticular, how citizens’expectations of opennessand accountability can bemet.


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At the most general level, governments might begin by asking these questions:

As promoter of economic development

• Is the economic environment in the country/city/region/sector conducive to

innovative investment?

• Do we have the necessary infrastructure — technology, markets, and skills?

• Are there effective relationships among government, industry, and the research

community?

As provider of services

• How does the public want services delivered, and how can we enable citizens

to share in leading change?

• How can we develop incremental programs for IoE so that we gain the

necessary experience in implementing innovative programs?

• How can we acquire the skills and knowledge necessary for success?

• Which new governance or business models may be required in an IoE

environment?

As policymaker and regulator

• How can we promote open debate about the acceptability of new systems,

particularly in relation to privacy, safety and security, and resilience?

• How can we ensure that all citizens benefit?

• How can we create an open-standards system that supports a dynamic and

competitive market?

How To Get StartedPublic-sector leaders have a unique opportunity to “act” rather than “react.” To get

started, public-sector leaders should:

• Determine which IoE capabilities their organizations have today

• Harness the complementary insights of both service and IT leaders

• Identify major IoE opportunity areas and establish an IoE vision

• Reach out to other organizations to share the benefits of IoE platforms

• Build an “IoE culture” by helping employees imagine the possibilities ofconnecting the unconnected

Public-sector leaders havea unique opportunity to “act”rather than “react.”


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The authors would like to acknowledge Jeremy Crump, Joan McCalla, Patrick

Spencer, Nicola Villa, Bob Moriarty, and James Macaulay for their valuable

contributions to the development of this paper.

Endnotes1. See, for example, the development of these techniques by Greater

Manchester Police in collaboration with University College London’s CrimeScience department, http://bit.ly/1bf6VYh

2. Source: http://nyti.ms/1hoU4Z1

3. The Digital Hometeads program, which is under development by CSIRO(Commonwealth Scientific and Industrial Research Organisation), JamesCook University (JCU), Queensland Department Agriculture, Fisheries andForestry (DAFF Queensland), and Queensland University of Technology.

4. Source: IDC, February 2013.

5. The “Internet of Things” (IoT) refers simply to the networked connection of

physical objects (doesn’t include the “people” and “process” components

of IoE). IoT is a single technology transition, while IoE comprises many

technology transitions (including IoT).

6. Source: http://bit.ly/19fPKeX

7. Source: http://bit.ly/1dSWHzV

8. Source: http://bit.ly/1dpAwRu

9. Source: http://bit.ly/1kmZc2c

10. Source: http://bit.ly/1errskk

11. Source: http://bit.ly/1kZ09vd

12. Source: http://bit.ly/19VGSpj

13. Source: http://bit.ly/1kZ0f6b. Note: The Dudley Project example showsa crime reduction of 23 percent through improved street lighting. Cisco’sestimate uses one-third of this value to preserve the conservative bias of itsanalysis and the differences in impact of standard street lighting and smartlighting.

14. Note: Any level of travel savings can be achieved by managerial fiat.Estimate is based on practical Cisco experience.

15. Source: http://www.enevo.com/. This figure is the likely maximum andhas been reduced to take into account different waste managementcontingencies.

16. Source: http://bit.ly/1gJ11XB. Website provides market rates for prisonertransport in the United States.

17. See “Embracing the Internet of Everything To Capture Your Share of $14.4Trillion,” Cisco, http://bit.ly/19VH4F1



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18. Source: http://bit.ly/1gJ18lS. The Conference Board “2011 ProductivityBrief: Key Findings” measured labor productivity growth at 3.3 percent in2010. Cisco used 3 percent as the long-term estimate in its analysis.

19. The critical need for security and privacy in IoE is underlined by U.S.President Barack Obama’s executive order on cybersecurity, signed onFebruary 12, 2013, which encourages all network operators, companies,and consumers to be cybersmart and cybersecure.

20. Source: http://1.usa.gov/1hoUG0K

21. The Free Dictionary (http://www.thefreedictionary.com ) defines “panopticon”as “a building ... so arranged that all parts of the interior are visible from asingle point.”

22. Source: Government Technology, March 2013.

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